London, United Kingdom, September 7th, 2023, Chainwire – Bumper, a decentralised finance (DeFi) protocol, today launched its crypto options killer. This new equation underpins the protocol and promises remarkable improvements over traditional Black-Scholes option desks, with an average of 30% savings and a potential to disrupt a $13 trillion market.
The protocol has been the result of a three-year research and development programme, supported by $20m in early funding, and collaborative efforts with the Swiss Center for Cryptoeconomics, known for its work on Synthetix, and coded by renowned developers Digital Mob who previously worked on protocols such as Barnbridge, Gnosis and Filecoin.
The protocol not only offers savings of up to one-third compared to traditional options desks but also pays between 3-18% APR to Liquidity Providers (LPs) supplying USDC to the protocol. Early adopters of Bumper have the chance to share in $250,000 worth of incentives, by either protecting their ETH or earning on their USDC.
Bumper’s Co-founder and CEO, Jonathan DeCarteret, states “Bumper removes the downside volatility of a user’s crypto tokens, paving the way for them to take leveraged positions with zero-liquidation risk. That in itself is a major breakthrough, but when you consider it’s on average 30% cheaper than the market leader, the value proposition becomes crystal clear.”
The protocol charges a premium which is calculated incrementally during the term, based on a combination of market conditions, protocol rebalancing and proximity to the user’s floor. This generates real yields for liquidity providers who realise returns ranging between 3-18% APR on average without the need to sell option contracts. Until now, the methodology for calculating the price for hedging risk relied on the fifty-year-old Black-Scholes model, which has fuelled the $13 trillion options market.
According to Mr DeCarteret, “Fifty years is a long time in tech and although Bumper uses completely different inputs and a novel rebalancing mechanism, it is surprisingly correlated with Black-Scholes, but more efficient, even under the most volatile of market conditions.”
Bumper has been deployed to the Ethereum mainnet, and is currently accepting deposits in ETH and USDC, with additional ERC-20 tokens and multi-chain support slated to be added to the protocol in rapid succession. For more information on Bumper, including early user rewards and incentives for rival DeFi options protocol users, visit bumper.fi.
About Bumper – Bumper is a DeFi risk market that provides protection from downside volatility of crypto assets. Users buying protection set a price at which they wish to protect their crypto should the price fall, but they don’t lose out if the market heads upwards. Conversely, other users earn a yield by providing stablecoin liquidity to the protocol. For more information, visit Bumper’s website, follow Bumper’s Twitter, and join the Bumper Discord.
Contact – Jason Suttie, CMO at Bumper, [email protected]